From Deseret News archives:

Halliburton subsidiary contracts are probed

Published: Monday, Oct. 25, 2004 9:27 a.m. MDT
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Kohn's complaint said contracts were approved over Greenhouse's reservations, handwritten on the original contracts, and extensions were awarded because underlings signed them without her knowledge and in collusion with senior officials.

After her superiors signed off on the Iraq contract and returned it for her necessary approval, the complaint said, Greenhouse wrote beside her signature: "I caution that extending this sole-source effort beyond a one year period could convey an invalid perception that there is not strong intent for a limited competition."

The contracts under investigation grew out of a $7 billion multiple-year award to Halliburton's KBR subsidiary to rehabilitate Iraq's oil industry after the U.S.-led invasion last year; and an 11-month extension, which cost $165 million, of a $2 billion services contract the Army awarded in May 1999.

The Iraq contract was awarded in February 2003, less than a month before the invasion, under a clause specifying no-bid contracts in cases of "compelling emergency." The complaint said Greenhouse objected to the five-year term, asking why the certainty that the emergency would continue for five years.

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Kohn said Sunday that he still wants an independent investigation and will ask Attorney General John Ashcroft to appoint investigators to conduct their own probe to ensure the investigation is complete, independent and fair to his client.

"This needs to be done by an outside agency," Kohn said. "From past experience, we are uncomfortable with the DOD-IG handling this investigation by themselves."

According to the complaint, in January 2002 Greenhouse sent an investigative team to examine the Balkan operation. Afterward, she reported: "The general feeling in the theater is that the contractor (KBR) is 'out of control"' and was able to manipulate Corps of Engineer officials.

The Balkan contract was to have expired no later than May 27 of this year but was extended, without Greenhouse's knowledge, after a hunt for other contractors was stopped. Whereas it originally was awarded as a compelling emergency, the extension was awarded under the exception that KBR was the "one and only source."

Greenhouse questioned why the reason for extension was changed. While she never was officially provided the answer, the document said, "two individuals" told her in her office that Tina Ballard, deputy assistant Army secretary for policy and procurement, was telephoned during a meeting on the matter and ordered the change for "political reasons."

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